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NISM Certifications · NISM-Series-VIII: Equity Derivatives · Introduction to Forwards and Futures

An investor buys 2 lots of a stock futures contract, lot size 500, at Rs 200. The day's settlement price is Rs 206. What is the investor's MTM position at day end?

The investor has an MTM profit of Rs 6,000. A long position gains when the settlement price exceeds the purchase price, by Rs 6 per share on 1,000 shares (two lots of 500), which equals Rs 6,000 credited to the margin account.

  1. ALoss of Rs 6,000
  2. BProfit of Rs 6,000Correct
  3. CProfit of Rs 3,000
  4. DProfit of Rs 1,200

Explanation

Quantity = 2 × 500 = 1,000 shares. Gain per share = 206 − 200 = Rs 6. MTM profit = 6 × 1,000 = Rs 6,000. Rs 3,000 uses only one lot; a loss would arise only for a short position.

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